ConvaTec raises FY outlook as YTD revenues improve
Medical products and technology firm Convatec upgraded its full-year guidance on Thursday as it reported group revenues had grown 2.4% on a reported basis over the ten months ended 31 October.
On a constant currency basis, revenue was up 7.8% and was up 6.3% on an organic basis. Following "sustained good sales growth", Convatec also increased its guidance for 2022 organic revenue growth to 5.4-5.8% from 4.0-5.5%.
Convatec said its advanced wound care unit had seen "high single-digit" organic revenue growth over the first ten months of the year, while ostomy care revenues were up low single digits, and continence and critical care revenues were up mid-single digits. Infusion care revenues were up double-digits for the first 10 months, slightly lower than in the first half.
For the year as a whole, Convatec said: "Inflation in raw materials and freight has moderated in recent months, but inflation in utilities and labour has increased. Overall, we continue to expect COGS inflation of 8-9% for the year and we continue to expect to deliver constant currency adjusted operating profit margin of at least 18%.
"Foreign exchange rate movements have been volatile in recent months. The FX impact on 2022 is currently estimated to be a ~6% headwind on revenue growth with a ~90bps tailwind to the EBIT margin. These estimates are based on actual rates to 31 October and spot rates for the remainder of the year. On this basis, we expect to publish an adjusted operating profit margin of over 19%."
As of 0850 GMT, Convatec shares were up 5.19% at 222.80p.
Reporting by Iain Gilbert at Sharecast.com